Maintaining their downward streak, Adani Group bonds fell for the second consecutive day as investors exited positions amid charges of bribery and fraud against the conglomerate. Moreover, Kenya’s cancellation of a nearly $2-billion deal that would have given the Adani Group control of the country’s main airport further dampened investor sentiment.
Adani Ports and Special Economic zone debt maturing in 2027 traded at 91.5 cents on the dollar, down more than a per cent on the day and more than 4% below Wednesday prices. Longer-dated maturities have fallen around 5% in two days and trade near 80 cents.
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Falls for Adani dollar bond prices on Friday included a 2.5% drop on the dollar for 2029 Adani Ports and Special Economic Zone bonds. Longer-dated maturities have fallen around 5% in two days and trade just below 80 cents.
Adani Transmission and Adani Electricity Mumbai bond prices also had similar declines.
Investors have turned cautious, and watching to see if more Adani deals could be cancelled in the wake of the indictments, said market participants.
The group also cancelled a separate 30-year, $736-million public-private partnership deal that an Adani Group firm signed with the energy ministry last month to construct power transmission lines.
Global investors have been demanding greater transparency now, leading to a further slowdown in the pace of project finance.
Ratings agency S&P warned in a statement that the group will need regular access to equity and debt markets given its large growth plans, but that access could now be hampered.
“We believe domestic, as well as some international banks and bond market investors, look at Adani entities as a group, and could set group limits on their exposure,” it said.
Following this, raising funds both in global markets and domestic markets is likely to become more difficult as a downgrade in ratings would mean the company is going to go through tough scrutiny, said market participants.
“Near-term looks bleak for Adani Group. This definitely has a knee-jerk reaction. But in long-term, things may stabilize,” a broker at a large brokerage firm said.
Also ReadAdani Group shares recover intra-day: Gain over 3% from recent lows
Analysts said that more bond offerings could be postponed,
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